Amazon’s Vogels: Cloud is the resource model for today’s uncertain economy


Amazon (s amzn) has been on the tips of everyone’s tongue Tuesday at our Structure:Europe event in Amsterdam as the de facto standard that everyone has to measure up against. So when Werner Vogels, CTO and VP of Amazon, joined Om Malik onstage to explain how cloud changes business models and how Europe is adopting cloud the audience was ready to hear Vogel’s thoughts on anything and everything.

Vogels spent a lot of time name dropping European customers — both startup and enterprises — while noting that startups may have been the first clients of Amazon Web Services, but they were followed a few months later by the financial services industry. The Wall Street guys saw that flexible computing was cheaper and faster for their Monte Carlo simulations, and so hopped on the AWS bandwagon.

But Vogels made a greater point about the adoption of cloud as part of an overall shift — not just for IT– but an example of the type of resource model we need today in times of economic uncertainty. When people are willing to try things once and dump them, and there are more and more startups offering products, no one really knows if they are going to succeed. But because one buys cloud on demand and as needed, it’s a resource model that is adapted to that uncertainty.

He then said Amazon and AWS has helped democratize the creation of new business because companies no longer have to spend capital buying servers. Instead they buy what they need when they need it — turning a capital expense into a lower (at that time) operational expense. Vogels thinks this goes beyond IT, which is undoubtedly bad news for anyone who might want a full-time job, even when sales are slow:

“In times of extreme uncertainty you need very different resource models,” Vogels said. “It’s not jsut cloud and IT resources — it’s human resources as well.”

In other bad news, Vogels responded to Om’s question about what happens to the HPs and Dells of the world as the cloud becomes widely adapted with the bad news (for the hardware guys) that there will be fewer overall customers for them and that Amazon will buy more. “There will be less and less data centers and we will operate more and more of them,” says Vogels.

Vogels ended by dodging Om’s question about what’s next for Amazon Web Services. After Om asked what was coming, Vogels said initially, “There are things coming down the pipe that you wouldn’t believe.” When Om pressed, Vogels ended with, “I’m not going to tell you. If Steve Jobs can get away with that, I can.”

And he did.

Check out the rest of our Structure Europe live coverage here, and a video recording of the session follows below.


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